You Ask, We Answer: More Of Your Questions About The Affordable Care Act

From left, Garrett Berntsen, Jennifer Majer and William Shields compare notes at The Johns Hopkins University School of Advanced International Studies in Washington, D.C. Twenty-somethings have new choices under Obamacare.

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Originally published on August 19, 2013 11:06 am

The Oct. 1 launch of the new health insurance exchanges is now less than two months away, and people are starting to pay attention to the changes these new marketplaces may bring to the nation's health care system.

We know it's confusing, so we're spending part of the summer and fall answering at least some of your questions about the law. You can see earlier pieces in our series here and here.

"I started going to graduate school two years ago, and ... someone like me who is older, I don't have any resources as much as a working person my age, so I was wondering what happens with those people while they are in school?"

-- Carolina Trabuco, Eugene, Ore.

"I heard that folks can opt out of employer-based insurance programs if it's cost prohibitive, and I was wondering how that works for graduate students because we are required to get insurance either through our school or on the market — can't go through the state. I'm wondering what the options are if the school insurance is cost prohibitive?"

— Rebecca Kahn, Somerville, Mass.

The first thing students need to know is that if they DO have student insurance through their college or university, that's been deemed to satisfy the requirement that individuals have health insurance starting in 2014. There was a question about that for a while, and it's been answered.

Then there's the question of what happens if you can't afford the insurance your school offers or what to do if your school doesn't offer coverage.

First, if you're a full-time student and you're not working, or if you're working just part-time, you probably don't earn enough to trigger the requirement to have health insurance. It applies only to people who earn enough to have to file income taxes; that's just under $10,000 this year for a single person under age 65.

Another issue that sparked a lot of interest was the possibility of penalties for NOT having health insurance.

"You said if you had to spend more than 8 percent of your income on premiums, then you get a waiver on the penalty. Is that for a whole family? Is it for individuals? Or is it on gross or net income? When is it going to be assessed? ... If you can't or don't want to buy insurance for some reason, might the penalty actually be less than a yearly premium?"

-- Erin Molnar, Ferndale, Mich.

"If you drive without a license, really nobody knows about it until you get caught. There are people who do live under the radar, so to speak. So if you're this person who's choosing deliberately not to get a health insurance policy, how does the government find you? Where do they look?"

-- Kathleen Orth, Alpena, Mich.

The penalty for not having health insurance is, at least for 2014, is $95 or 1 percent of your taxable income — whichever is greater. It does go up in later years, eventually to a maximum of 2.5 percent of taxable income.

It's assessed, if you owe it, on your 2014 income tax form that's due April 15, 2015. And that's how the government finds you — it asks on your income tax form if you had health insurance. People who have it will get some sort of certificate of coverage from their health insurers. And a reminder — you can't go to jail for not paying the penalty; the government can't even garnish your wages. The most the IRS can do is withhold your tax refund. See the answer to the last question in this IRS fact sheet.

And one final, penalty-related question:

"If both husband and wife work for separate companies, and both companies offer health insurance, is there a penalty if one obtains health insurance under the other's policy?"

-- Louis Tortorelli, Churchill, Tenn.

It depends on how you define the word penalty. Seriously.

From the government — no. To reiterate, pretty much all employer insurance counts as coverage for purposes of fulfilling the insurance requirement. Take your own, take your spouse's. It doesn't matter.

Some companies, however, (and this is something that pre-dates the Affordable Care Act) impose a penalty if an employee's spouse (who doesn't work for the same firm) has coverage available from his or her own job. The theory is that the company doesn't want to be providing benefits to another company's employee. But however you make the calculation that's best for your family, it doesn't matter for purposes of the health law.

Do you have a question about how the Affordable Care Act will work or how it might affect you? Email your questions to MorningEdition@npr.org.

We'll answer questions in upcoming segments.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

DAVID GREENE, HOST:

OK, the young man at the end of that last story is planning to get his health insurance through his graduate school. How and whether school insurance plans satisfy the requirements of the Affordable Care Act are one question on the minds of younger Americans.

Now, we know a lot of this is confusing. But luckily, we've got our own, in-house expert to help. NPR's Julie Rovner has been sorting through the questions that you've sent in about the new health care law, and she joins us again here in the studio to answer some of them.

Hey, Julie.

JULIE ROVNER, BYLINE: Hey, David.

GREENE: So I guess we're going to do things a little differently this time, compared to the last few times you've been in.

ROVNER: That's right. We're finding that a lot of the questions we've been getting seem to be falling kind of naturally into categories. So today, we're going to address a couple of categories, starting with how the law affects students and their health insurance.

GREENE: OK. And I see we have a couple questions from students. The first comes from Carolina Trabuco from Eugene, Ore.

CAROLINA TRABUCO: I read about the health care act, and I didn't see anything about students. I wondered, like, someone like me who is older, I don't have any resources as much as a working person at my age. So I was wondering wht happens with those people while they are in school.

GREENE: OK. So Carolina is wondering how the law affects people in school. And it's also on the mind of Rebecca Kahn, a graduate student from Somerville, Mass.

REBECCA KAHN: I heard that folks can opt out of employer-based insurance programs if it's cost-prohibitive. And I was wondering how that works for graduate students because we're required to get insurance either through our school or on the market.

GREENE: OK, a couple different questions there, when it comes to students and the Affordable Care Act. Julie, how does it work?

ROVNER: Well, the first thing students need to know is that if they do have student insurance through their college or university, that has been deemed to satisfy the requirement that individuals have health insurance starting in 2014. There was a question about that for a while, and it has been answered.

Then comes the question of what happens if you can't afford the insurance your school offers, or what to do if your school doesn't offer coverage. First, if you're a full-time student and you're not working, or if you're maybe working just part time, you probably don't earn enough to trigger the requirement to have health insurance. It only applies to people who earn enough to have to file income taxes; that's just under $10,000 this year.

GREENE: And what if you do want health insurance? Well, one very popular part of the law lets young adults stay on their parents' health insurance plans until they turn 26. And in states that opt to expand the Medicaid program, that's an option for college and graduate students that hasn't been available before. It's for people who earn up to 133 percent of poverty - that's about $15,000 a year, for an individual. But so far, only about half the states are planning to expand Medicaid. So that won't be available to everybody.

GREENE: OK. So to sum up, very few students are going to face this requirement to have health insurance. And for those who want to have health insurance, some options - they can stay on their parents' plan; maybe use their school plan, Medicaid also an option, if states expand Medicaid.

ROVNER: That's right.

GREENE: OK. Well, let's turn to the penalty that's on a lot of people's minds; this penalty people might face if they don't have health insurance and they are required to. Here's a question that came from Erin Molnar from Ferndale, Mich.

ERIN MOLNAR: What is the penalty? How is it going to be assessed? Is it feasible that if you can't or just don't want to buy insurance for some reason, might the penalty be less than actually paying for a yearly premium?

GREENE: OK. And here's a question from someone else - Kathleen Orth, also from Michigan. She's from Alpena.

KATHLEEN ORTH: If you're this person who is choosing deliberately not to get a health insurance policy, you know, how does the government find you? Where do they look?

GREENE: OK. So people wondering how much the penalty will be, and how the government is going to track you down to make you pay it?

ROVNER: That's right. There seem to be a lot of worried people here. And they really shouldn't be. The penalty for not having health insurance is, at least for 2014, $95 or 1 percent of your taxable income, whichever is greater. That's almost certainly going to be a lot less than actually buying insurance. It does go up in later years, eventually to 2.5 percent of taxable income. That's probably still going to be less than buying insurance. The penalty is assessed if you owe it, on your 2014 income tax form that's due April 15, 2015...

GREENE: Ah-ha.

ROVNER: ...That's how the government finds you. They ask on your income tax form if you had health insurance. People who have insurance will get some sort of certificate of coverage from their health insurers. And just a reminder; You can't go to jail for not paying the penalty; they can't even garnish your wages. The most the IRS can do is withhold your tax refund.

GREENE: And they can withhold your whole tax refund, or just the amount that you owe, Julie?

ROVNER: Just the amount that you owe.

GREENE: OK, and if you don't get a refund, I presume they just add it to your tax payment that you have to make.

GREENE: And she'll answer these questions in more detail at our website, npr.org. And if you have questions for a future segment to throw Julie's way, you can send it to MORNING EDITION@npr.org. Transcript provided by NPR, Copyright NPR.